R-Multiple

A position-sizing concept popularized by trading psychologist Dr. Van Tharp that expresses a trade's result as a multiple of the initial risk (R). If a trader risks $200 on a trade and makes $600, the result is +3R; a loss at the stop would be -1R. Thinking in R-multiples normalizes returns across different trade sizes and account balances, making it easier to evaluate strategy performance and compare results across traders.